CRYPTO CRUSHERS

Feds clamping down on digital currency frenzy

Beware of companies looking to profit in bitcoin’s wake.

As the value of the cryptocurrency has soared nearly 18fold this year, regulators are moving to clamp down on some of the more questionable operations promising riches from bitcoin-like business.

The latest company to fall under the Securities and Exchange Commission’s gaze is the Crypto Co., whose shares skyrocketed 2,700 percent in the past month.

The SEC has suspended trading in the Malibu, Calif., company’s shares until Jan. 3 while it investigates “potentially manipulative transactions.”

The company, which claims to offer “a portfolio of digital assets” and consulting services to the blockchain and cryptocurrency markets, saw its shares debut in September at $3.30.

They closed Monday at $575, giving the company a market capitalization of $11.9 billion — nearly as valuable as the Gap.

The SEC has been taking a harder look at the cryptocurrency space since June, when it said initial coin offerings should be regulated like regular securities.

In September, the regulator launched a Cyber Unit tasked with targeting misconduct in the cryptocurrency space, which also includes ICOs and companies that use bitcoin’s blockchain technology.

Crypto Co. was formed in June, when it merged with Croe Inc., a Utah-based sportsbra company.

The SEC, in halting trading in Crypto, said it was concerned about the “accuracy and adequacy” of information in statements Crypto made in public filings about intentions for insiders to sell shares of Crypto’s common stock.

“All investors should be cautious when they see volatile markets such as this,” Chief Executive Mike Poutre said at the time.

In explaining the reasoning behind the planned split, Crypto cited that Mastercard and Apple completed similar splits when their respective stocks soared.

Crypto touts itself “as one of the first publicly traded tech- nology companies” that provides investors with “responsible access” to cryptocurrencies and blockchain technologies.

Reps from Crypto Co. did not immediately respond to requests to comment.

The crackdown against Crypto is the latest action in the SEC’s efforts to regulate the booming cryptocurrency space.

Bitcoin was priced at $17,386.49 as of 5:30 p.m. Tuesday, according to Coindesk — representing an 18-fold increase in the cryptocurrency over the past year.

In other SEC actions against companies in the cryptocurrency space:

Last week the regulator halted a $15 million initial coin offering by restaurant review app Munchee.

Earlier this month the SEC sued Canada-based Plexcorps, which was launching an ICO that promised a 13-fold profit in a month.

On Nov. 1, the SEC called out celebrities who have promoted ICOs, saying they may be violating “anti-touting provisions” in federal securities laws. (Paris Hilton and Floyd Mayweather are two celebs that have touted ICOs).

SEC Chair Jay Clayton issued a statement last week urging Main Street investors to exercise “extreme caution” when investing in cryptocurrencies.